International Financial Reporting Standards_guide.pdf

352 Chapter 32 Earnings per Share (IAS 33)
TABLE 32.1 Calculation of Weighted Average Number of Shares (continued)
Shares
Effect on
number of shares
Effect on current period
number of shares
Effect of current period
on prior period
number of shares
Capitalization or bonus issue;
that is, when additional
ordinary shares are issued to
existing shareholders for no
consideration in proportion to
their current holdings
Increase
Number of shares up to
the date of capitalization
issue divided by the number
of shares issued for every
share held
Total number at period end
divided by number of shares
for every share held
Rights issue at less than fair
value; that is, when the entity
issues shares at less than
their fair value
Increase
Number of shares before
rights issue multiplied by
the adjusting factor for the
number of days over 365.
This is then added to the
number of shares per rights
issue for the number of days
over 365
Total number at period end
multiplied by the adjusting
factor
Ordinary shares issued
after reporting date before
authorization of fi nancial
statements for issue
If at fair value: there is no
effect
If at less than fair value:
change the number as above
See above dependent in type
of issue
See above: dependent on
type of issue
Diluted Earnings per Share
32.4.5 Diluted earnings per share is the profit or loss attributable to each ordinary and
potential ordinary share in issue at reporting date. It is calculated by adjusting the basic
earnings per share calculation for the effect of dilutive potential ordinary shares:
Diluted earnings
Weighted average number of ordinary +
weighted average number of potential ordinary shares outstanding
32.4.6 Diluted earnings (numerator) is the profit or loss attributable to ordinary equity holders
of the parent entity and (if presented) profit or loss from continuing operations attributable
to those equity holders, adjusted for the effects of all dilutive potential ordinary shares.
32.4.7 Diluted earnings consist of the basic earnings adjusted for after-tax effects of the following
items associated with dilutive potential ordinary shares:
■ dividends or other related items (for example, the savings in preference dividends) that
would not be distributed if the convertible preference shares were already converted;
■ interest recognized for the period (for example, the interest savings on convertible
debentures if they were already converted); and
■ other changes in income or expense that would result from a conversion of the shares
(for example, the savings on interest related to these shares, which can increase
expenses for a non-discretionary employee profit-sharing plan).